UPDATE:Fannie,Freddie Loan Modifications Up 50% After Takeover
06 Februar 2009 - 7:28PM
Dow Jones News
Fannie Mae (FNM) and Freddie Mac (FRE) boosted their loan
modifications by 50% in the first two full months after being
seized by the government, their regulator said Friday.
The mortgage giants' loan modifications for October and November
of 2008 were up 50% from the previous two months, reflecting
foreclosure freezes at both companies that gave them more time to
revamp the terms of troubled loans, according to a report from the
Federal Housing Finance Agency.
However, total loan modifications remained a small, albeit
growing, fraction of foreclosure starts on the 30.6 million
residential mortgages Fannie and Freddie own or guarantee.
During October and November, they completed 13,891 loan
modifications, or just 15% of the 90,913 foreclosure starts during
the period.
Over August and September, the government-sponsored enterprises
completed 9,223 loan modifications, nearly 11% of the 85,139
foreclosure starts those two months.
"These data reflect the increased commitment of the servicers
and the GSEs to help borrowers in trouble modify their loans to
keep them in their homes," FHFA Director James B. Lockhart said in
a statement.
The data were contained in a report detailing all loss
mitigation efforts by Fannie and Freddie in November.
The share of mortgages 60 or more days past due that result in
foreclosure starts has been steadily dropping, according to the
report. The proportion fell to 5.25% in November from 6.44% in
October. During the first quarter of 2008, the share of such past
due loans that resulted in foreclosure starts was 8.29%.
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228;
jessica.holzer@dowjones.com